Source : Tax Administration Of Jamaica

Tax Administration Jamaica (TAJ) is advising that after careful consideration, withholding tax on specified services will now be implemented on June 1, 2015. The new legislation will be introduced on a phased basis. At this time only Government Ministries, Departments and Agencies, as well as financial institutions regulated by the FSC and BOJ, tourism operators, utility and cable companies, grossing over $500 million will be required to withhold 3% from payments made on specified services on invoice value of $50,000 or more.

It should be noted that notwithstanding the withholding of the 3% income tax, persons from whom the tax is withheld are still obligated to file annual and estimated income tax returns and meet their quarterly obligations. They will however be able to claim as an income tax credit, amounts certified as being withheld against their quarterly and final obligations. Any excess credit is refundable on the final return.

The withholding tax on specified services is aimed at capturing persons liable to income tax but who are under reporting or not registered. It is expected that this tax measure will assist in the broadening of the tax base, increased reporting compliance and improved revenue collection.

The concept of withholding tax is not new to Jamaica. This mechanism is being used in other areas, such as in relation to employment PAYE, payment to non-residents, Contractor’s Levy and GCT on government purchases.

Over the years withholding tax has proven to be an efficient mode of tax collection and complements the administration of a self-assessment system. It is also in keeping with international trends.

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Source: Tax Administration Of Jamaica

Property Owners are being reminded that they have until April 30, 2015 to pay their Property Tax for the 2015-2016 fiscal year, after which a 10% may be applied for late payment. It should be noted that Property Tax for the current year, which became due on April 1 has not been increased and therefore payment remains the same as last year.

The public is reminded that they have the option of making their property tax payments in half-yearly instalments in April and October or in quarterly instalments due April, July, October, and January. Any property tax paid in full or first instalment made after April 30 may attract the 10% penalty.

It should be noted that the 10% penalty for late payment for amounts outstanding for the 2014– 2015 fiscal period was applied on April 1, 2015, following several extensions.

Persons who are in arrears for previous years are cautioned that compliance action may be taken against them for the overdue amounts. Persons experiencing a difficulty paying the outstanding amounts are advised to visit the nearest tax office to speak with a Compliance Officer to make an arrangement to pay.

Property Owners can pay their property tax online via the recently upgraded TAJ Enterprise Portal at www.jamaicatax.gov.jm. Owners are also reminded that they may check their Property Tax obligations using the Property Tax Query Online Query. The service allows property owners to log on to TAJ’s website and enter their valuation number, to check the status of their property tax, showing the last seven (7) years.

In addition to the online option, property owners are reminded that property tax payments may be made at any of the 29 tax offices across the island. Persons paying by cheque may also pay using the electronic drop boxes located in main tax offices.

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In light of recent discussions in the media, Tax Administration Jamaica wishes to advise the public that ALL entities, whether operating as a charity or otherwise, are required to deduct and pay over statutory amounts for income tax, education tax, NIS, NHT and HEART contributions for their employees monthly, under the PAYE system. All employers are also required to pay the employer’s contribution in relation to persons on their payroll. Employers are reminded that the monthly statutory payments are due by the fourteenth of each month. Late payments attract interest and penalties automatically.

It should also be noted that an entity’s charitable status does not absolve it of certain obligations, including that as an employer. The tax authority would therefore be obliged to take compliance action, if the entity is found to have outstanding payroll taxes.